REM-OFF and REM-ON neurons in the brainstem are reported to regulate REM sleep, however, the detailed mechanism of generation of REM sleep is unknown. The former are continuously active except during REM sleep and an inhibitory neurotransmitter, GABA, has been implicated in mediating the inhibition for the generation of REM sleep. The REM-ON neurons, on the other hand, remain inactive throughout but increase firing during REM sleep. This study was conducted to investigate if GABA in the brain area rich in cholinergic REM-ON neurons would modulate REM sleep as proposed earlier. Rats were surgically prepared for sleep-wake recording and two cannulae aiming pedunculopontine areas in the brainstem that are rich in REM-ON neurons, were implanted bilaterally. After recovery, picrotoxin, a GABA(A) antagonist, was simultaneously microinjected bilaterally into the pedunculopontine area in freely moving normally behaving rats using a remote dual syringe pump and the effects were studied on electrophysiological sleep and waking parameters. The results showed that picrotoxin significantly reduced REM sleep for 6h and the effect was due to reduction in the frequency of generation of REM sleep.